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IRWIN FINANCIAL CORPORATION ANNOUNCES RECORD THIRD QUARTER RESULTS

 COLUMBUS, Ind., Oct. 18 /PRNewswire/ -- Irwin Financial Corporation (NASDAQ-NMS: IRWN) today announced that it earned net income of $3,865,849 or $0.66 per share for the three months ended Sept. 30, 1993. On a per share basis, this was an increase of 10.0 percent over third quarter 1992 earnings of $3,477,602 or $0.60 per share. Return on average equity for the quarter was 23.90 percent. Year to date, the corporation has earned $11,188,726 or $1.91 per share, compared to $8,602,709 or $1.49 per share in the first nine months of 1992, an increase of 28.2 percent. Per share figures for prior periods are adjusted for the effect of the two-for-one stock split on Sept. 2, 1993.
 Total revenues in the third quarter of 1993, net of loan and lease loss provision, were $30.8 million, up 18.2 percent from $26.1 million in the third quarter of 1992. This performance was the result of significant growth in mortgage servicing fees and mortgage origination revenues at the corporation's mortgage banking subsidiary, Inland Mortgage Corporation, and strong loan growth at Irwin Union Bank and Trust Company.
 Inland took advantage of the continuing favorable market conditions tf?urther expand its mortgage loan production operations and to increase the size of its mortgage servicing portfolio. Net income at Inland was $2.9 million in the third quarter of 1993, down $0.5 million or 13.6 percent from the year earlier period when Inland recorded $2.4 million in revenues from the sale of mortgage servicing rights. Servicing sale revenue in the third quarter was $0.1 million, down 95.2 percent from the same period in 1992.
 Reducing the level of servicing sales in the quarter had the effect of decreasing current period reported GAAP earnings, while increasing the off-balance sheet value of Inland's servicing portfolio. For example, an alternative method of measuring the results of operations would be to add to reported GAAP after-tax earnings the income that would have been produced by the sale of mortgage loan servicing rights in an amount equal to the net addition to servicing during the quarter. This alternative measure is referred to as "economic earnings". Using an assumed pre-tax value of 1.5 percent of the principal amount of servicing added in the quarter, Inland's economic earnings during the third quarter of 1993 was $9.8 million, up 19.7 percent from a year earlier.
 Loan origination revenue at Inland was $14.2 million, an increase of 36.5 percent over the third quarter of 1992. Inland achieved quarterly loan closings in the third quarter of $1.2 billion, up 32.0 percent from the same quarter in 1992. Included in origination income are "marketing gains" which totaled $4.1 million, 23.8 percent above the third quarter of 1992. Marketing gains are created when pools of mortgage loans produced by the company are sold into the secondary market at a profit. Refinances accounted for 34.7 percent of Inland's third quarter loan closings. While this is above Inland's traditional levels, it is estimated to be less than industry averages.
 Strong mortgage loan origination and the decrease in the sale of mortgage servicing rights allowed Inland to significantly increase its mortgage servicing portfolio. Inland's mortgage loan servicing portfolio was $7.2 billion as of Sept. 30, 1993, up $2.5 billion or 52.4 percent from the same date in 1992. Servicing revenue during the quarter was $6.2 million, up 54.5 percent over the third quarter of 1992. High levels of refinance activity have made portfolio run-off a significant issue for many mortgage bankers in recent quarters. The annualized rate of Inland's portfolio run-off during the third quarter of 1993 was 25.8 percent, below the rate of 33.6 percent in the third quarter of 1992. We believe that this is well below the experience of some other mortgage banks due to the relatively low coupon rates on the loans Inland services. This run-off is fully provided for by Inland's $0.8 million amortization of purchased mortgage servicing rights during the quarter. Inland's capitalized servicing as a percentage of total servicing rights was 0.18 percent as of Sept. 30, 1993, well below industry averages. The weighted avera ?coupon of the servicing portfolio was 7.77 percent with a delinquency ratio of 2.19 percent as of Sept. 30, 1993.
 The corporation's commercial banking subsidiary, Irwin Union Bank, pursues a dual strategy of positioning itself as a local bank in south- central Indiana, while also providing wholesale banking services to affiliated Irwin Financial companies. The Bank's net income totaled $1.3 million, an increase of 16.8 percent as compared to the third quarter of 1992. Consumer and commercial loan and lease portfolios increased 16.9 percent year-over-year and the bank maintained strong net interest margins, which combined to produce a $595.6 thousand or 16.3 percent increase in net interest income after provision for loan and lease losses. The provision for loan and lease losses was $409.0 thousand in the third quarter, up 1.0 percent from a year earlier.
 Net income at Irwin Union Investor Services, which offers investment management and securities brokerage services, was $88.6 thousand, an increase of 183.6 percent from the third quarter of 1992. Trust revenues increased 21.8 percent during the third quarter of 1993, compared with the same period in 1992.
 Affiliated Capital Corp., which specializes in leasing small-ticket medical equipment, recorded a profit of $11.0 thousand for the quarter-- a substantial improvement over the net loss of $174.9 thousand in the third quarter of 1992. Total revenues at Affiliated increased 74.3 percent over the level recorded in the third quarter of 1992. In the third quarter of 1993, lease volume was $5.8 million, up 18.4 percent from the same period a year earlier.
 The corporation's assets totaled $829.3 million as of Sept. 30, 1993, up $137.1 million or 19.8 percent from a year earlier. Average assets were $747.0 million in the third quarter of 1993, an increase of 11.6 percent compared to the third quarter of 1992. Mortgage loans originated by Inland, which are held awaiting sale in the secondary markets, totaled $382.4 million on Sept. 30, 1993, up 14.8 percent from $333.1 million a year earlier. Other loans, predominantly consumer and commercial loans and leases at Irwin Union Bank, totaled $242.2 million on Sept. 30, 1993, an increase of $35.2 million or 17.0 percent over Sept. 30, 1992.
 The corporation benefited from a 64.6 percent year-over-year increase in non-interest bearing deposits which totaled $223.1 million on Sept. 30, 1993. Much of the increase is related to deposits at Irwin Union Bank which are associated with escrow accounts held on loans in the servicing portfolio of Inland Mortgage. These escrow accounts totaled $168.8 million as of Sept. 30, 1993, up 90.3 percent from $88.7 million a year earlier. Of the $168.8 million in escrow deposits, approximately $50.0 million are short-term deposits relating to the pay- off of mortgage loans, including refinanced mortgage loans. The level of these deposits, which are scheduled for remittance to investors, is driven by the level of mortgage refinancing activity.
 Nonperforming assets (including other real estate owned of $0.6 million) were $3.2 million or 0.39 percent of total assets as of Sept. 30, 1993, down from $5.1 million or 0.74 percent of total assets a year earlier. This figure remains below peer averages. The total allowance for loan and lease losses at the end of the third quarter was $3.1 million, or 1.28 percent of total loans and leases, compared with 1.66 percent of total loans and leases a year earlier. The consolidated provision for possible loan and lease losses in the third quarter of 1993 was $0.4 million, a decrease of 19.0 percent over the third quarter of 1992. This year-over-year decrease in light of strong loan growth is reflective of improved asset quality and relatively high provisions taken in the third quarter of 1992.
 The corporation had $65.8 million or $11.35 per share in shareholders' equity as of Sept. 30, 1993, up 28.4 percent from the same date in 1992. Off-balance sheet mortgage servicing rights would add approximately $57.0 million or $9.82 per share to the corporation's economic net worth if sold at 1.5 percent of the servicing portfolio's principal balance. As of Sept. 30, 1993, the corporation's ratio of equity to assets was 7.93 percent compared to 7.40 percent a year earlier. The ratio of average equity to average assets was 8.59 percent in the third quarter of 1993 compared to 7.47 percent in the year- earlier period. At Sept. 30, 1993, the corporation's total risk-based capital to assets ratio was 14.95 percent, up from 14.17 percent as of Sept. 30, 1992.
 Irwin Financial Corporation is an interrelated group of financial services companies serving niche markets. The corporation, through its four principal operating subsidiaries -- Inland Mortgage Corporation, Irwin Union Bank and Trust Company, Irwin Union Investor Services, Inc. and Affiliated Capital Corp. -- provides a broad range of commercial, retail and mortgage banking services as well as trust, investment, leasing, and insurance services through 58 offices in 16 states.
 IRWIN FINANCIAL CORPORATION
 Financial Highlights
 1993 1992 Pct. Change
 Third Quarter:
 Net Interest Income $8,473,363 $7,658,708 10.6
 Provision for Possible Loan
 and Lease Losses (409,000) (505,000) (19.0)
 Noninterest Income 22,757,544 18,933,152 20.2
 Total Net Revenues 30,821,907 26,086,860 18.2
 Noninterest Expense 24,242,058 20,283,258 19.5
 Income before Income Taxes 6,579,849 5,803,602 13.4
 Income Taxes 2,714,000 2,326,000 16.7
 Net Income 3,865,849 3,477,602 11.2
 Other Data:
 Dividends 434,409 286,316 51.7
 Mortgage Loan Closings 1,167,662,122 884,643,964 32.0
 Per Share (A):
 Net Income $0.66 $0.60 10.0
 Dividends 0.075 0.050 50.0
 High Market Stock Price 25.75 18.13 42.0
 Low Market Stock Price 21.00 12.13 73.1
 Performance Ratios -- Quarter to Date:
 Return on Average Assets (pct) 2.05 2.07
 Return on Average Equity (pct) 23.90 27.66
 Year to Date:
 Net Interest Income $22,955,886 $20,860,213 10.0
 Provision for Possible Loan
 and Lease Losses (1,068,000) (1,415,000) (24.5)
 Noninterest Income 62,707,258 49,478,585 26.7
 Total Net Revenues 84,595,144 68,923,798 22.7
 Noninterest Expense 65,982,418 54,836,089 20.3
 Income before Income Taxes 18,612,726 14,087,709 32.1
 Income Taxes 7,424,000 5,485,000 35.4
 Net Income 11,188,726 8,602,709 30.1
 Other Data:
 Dividends 1,297,824 854,941 51.8
 Mortgage Loan Closings 2,948,000,131 2,475,633,866 19.1
 Per Share (A):
 Net Income $1.91 $1.49 28.2
 Dividends 0.225 0.150 50.0
 High Market Stock Price 27.25 18.13 50.8
 Low Market Stock Price 20.63 8.00 157.5
 Performance Ratios -- Year-to-Date:
 Return on Average Assets (pct) 2.22 1.90
 Return on Average Equity (pct) 24.62 24.50
 At Sept. 30:
 Mortgage Servicing
 Portfolio $7,214,183,589 $4,733,267,849 52.4
 Capitalized Mortgage
 Servicing 13,285,903 12,111,471 9.7
 Mortgage Loans Held
 for Sale 382,401,020 333,081,700 14.8
 Total Loans 242,206,791 206,984,866 17.0
 Allowance for Possible Loan
 and Lease Losses 3,093,243 3,426,001 (9.7)
 Total Assets 829,262,027 692,176,606 19.8
 Shareholders' Equity 65,788,199 51,221,812 28.4
 Per Share (A):
 Shareholders' Equity $11.35 $8.94 27.0
 Market Stock Price 25.25 18.13 39.3
 Average Shares
 Outstanding YTD 5,853,435 5,767,062 1.5
 (A) -- 1992 amounts adjusted for 2-for-1 stock split effective Sept. 2, 1993.
 Certain 1992 amounts reclassified to conform to 1993 presentations.
 -0- 10/18/93
 /CONTACT: Thomas D. Washburn, 812-376-1769, or Gregory F. Ehlinger, 812-376-1935, both of Irwin Financial Corporation/
 (IRWN)


CO: Irwin Financial Corporation ST: Indiana IN: FIN SU: ERN

KL-BM -- CL013 -- 3340 10/18/93 11:19 EDT
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Date:Oct 18, 1993
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